Last post I mentioned a new Dutch community site for retail investors. It’s looking allright but is still seriously lacking critical mass. Anyway, the site is launched by online broker Binck/Alex and although they are evolving into a straight competitor of Euronext’s stock trading platform – the relationship between them is fine. In this column there’s some interesting news to be read (Dutch).

Ideas from the product development department remain there most of the time, but one of the following ideas may seriously make it to your screens:

  • Extended trading hours for daily AEX options until 18:15. The future remains open for trading until 22:00 anyway, so there’s hardly any barrier to block trading in the options. Maybe it brings some extra flow, and other professional traders could hedge some risks after the regular close. Forcing liquidity providers to keep on quoting another 45 minutes could be another story.
  • Future contracts on the AMX Midkap index. Point of discussion is which block size should be used. Margin requirements would be killing with a similar block size like the AEX. With a tradable future contract – options on the AMX are just a small step.
  • The outrageous transaction fees effectively prevent real trading in the weekly single stock options. While cutting fees to competitive levels is a bridge too far for Euronext, considered is expanding the contract size from 100 to 1000 underlying stocks.
  • Introduction of futures on gold. Not as easy as it seems. Physical delivery is the common style in the rest of the world, instead of cash settlement.

TOM

In the meantime the trading of shares is slowly getting more fragmented. Chi-X is doing great volumes, and the other contender TOM is gaining a little bit of significance. Their market share is something like one percent of Euronext, but in some typical retail stocks (SNS, BAM, Wavin, Logica) TOM is doing a lot more – up to 4% (pdf). This week they managed to get a day with 4% in ING and even 8% in SNS.

Dobber

Finally, there’s some good news to report as well. Quotenet reports Jan Dobber (Optiver) managed to find a bid for his house in Bloemendaal. For sale as of May 2009, he had to cut price from 3.2 million to 2.3 million. No need to feel pity about the price drop. He bought it for as little as 1 million back in 1998.

Trading floor

After All Options left the big trading floor in the exchange building, the area must have looked empty and deserted. Smaller firms currently trading from an office in the exchange building will move to parts of the trading floor. Leopark as well as Klinkenberg will trade from there for at least three months.

Timber Hill

A commenter submitted a link to the released earnings of Interactive Brokers. Their market making unit Timber Hill did a lot worse than 2009, with revenues dropping 73% due to low volatility and tight spreads. No indications of Norwegian retail traders fooling their system this time.

Jack
Jack